Porter’s Five Forces Analysis of Lululemon 

Lululemon is a retail chain sports apparel store company. Chip Wilson founded the sports apparel chain store company in 1998. Today, we’ll discuss Porter’s five forces analysis of Lululemon; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Substitutes and Competitors of Lululemon

• Gap
• Athleta 
• Adidas
• Beyond Yoga
• Puma
• Under Armour
• Sweaty Betty
• Outdoor Voices
• Nike 

Porter’s five forces analysis of Lululemon would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Lululemon Porter’s five forces analysis of sports apparel business as follows;

Porter’s Five Forces Analysis of Lululemon

Let’s discuss Porter’s five forces analysis of Lululemon as competitive forces in strategic management and they’re as follows; 

Bargaining Power of Suppliers in Lululemon

The bargaining of suppliers is low in the sports apparel business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in Lululemon Porter’s 5 forces analysis of sports apparel business are as follows;

I-Raw Material & Textile Suppliers 

Cotton and polyester material-providing suppliers are easily and readily available in various countries across the world. Easy availability of suppliers and production of raw materials decreases the bargaining power of suppliers in the sports apparel, clothing, and textile market. 

II-Suppliers Integration 

Many suppliers prefer to partner up and collaborate with the world’s leading brands like Lululemon. It ensures them the smooth supply of their raw material to one brand and they don’t have to find new clients every time. On the other hand, the chain sports apparel brand would receive the quality material for production operations. 

III-Low Switching 

Lululemon could easily switch from one supplier to another without incurring any cost; because the raw material suppliers are available excessively. However, it increases the company’s bargaining power over choosing the right suppliers. 

Bargaining Power of Buyers in Lululemon

The bargaining of Buyers is Higher in the sports apparel business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the Lululemon 5 forces analysis of the sports apparel business are as follows;

I-Alternative Clothing Brands 

The consumer market is very large and it is as large as the global population. There are multiple sports apparel brands operating their business in the clothing and textile business market. However, they all offer unique styles of clothing and apparel sportswear; which increases the bargaining power of ordinary customers. 

II-Low Brand Loyalty

The customers have limited brand loyalty in the sports apparel, clothing, and textile industry. It is mainly because customers are always looking for unique styles of clothing, and they want to try something new and different. 

III-Price Sensitivity 

The consumer market is highly-priced, a vast majority of them. They could easily switch from one brand to another if the other competitive brand is offering sports apparel at a lower price. Therefore, the sports apparel brand can’t increase their price to a certain limit. 

Threat of New Entrants in Lululemon

The threat of new entrants is lower in the sports apparel business as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the Lululemon five forces analysis of the sports apparel business are as follows;

I-Mass Scale Product & Investment 

Lululemon has established a very large network of chain apparel stores of over 700 in various countries across the world. The company is manufacturing sports apparel products at a mass scale to serve the global customers. On the other hand, the new entrants won’t have sufficient capital funding to launch their operation at a mass scale; it decreases the threat of new entrants. 

II-Design Patent and Trademark

Along with heavy capital investment, the company has earned patents and trademarks for its unique brand logo, designs, and styles of clothing and apparel. It helps the company to maintain the differentiation factor from another competitive brand. However, it further decreases the threat of new entrance rates due to substitution. 

Threat of Substitutes to Lululemon

The threat of substitute products and brands is higher in the sports apparel business as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in Lululemon Porter’s five forces analysis of the sports apparel business are as follows;

I-Casual wear Clothing 

Sportswear apparel like yoga pants, tights, and shorts aren’t necessary items for exercising and workouts. Customers could easily find the sports apparel of various brands in the retail store relevant to their budget. In fact, they can perform exercises and workouts in casual clothing, and it increases the threat of substitution rate. 

Competitive Rivalry in Lululemon

The competitive rivalry in the sports apparel business market is very high as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in Lululemon Porter’s five forces analysis of the sports apparel business are as follows;

I-Tough Competition 

Lululemon is facing tough competition from brands like Adidas, Nike, Puma, and Gap. They all have earned a significant market share in the sportswear industry along with brand awareness. It presents a great challenge to the chain sports apparel brand to maintain its market share and remain profitable. 

II-Product Differentiation 

In order to beat the competition, Lululemon focuses on quality materials, comfortable clothing, and unique designs and styles of its apparel. It helps the sports apparel brand to successfully differentiate itself from the competition; and maintain its unique brand positioning in the sports market. 

Conclusion: Lululemon Porter’s Five Forces Analysis |5 Forces Analysis of Lululemon

After an in-depth study of Porter’s five forces analysis of Lululemon; we have realized that Lululemon is the world’s leading retail chain sports apparel brand. If you are learning about Lululemon five forces analysis of sports apparel business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.